Chapter 42. A Recipe for Growth: Adding Layers to the Cake
Businesses don’t grow themselves. One of the most important jobs of a CEO is to aggressively define and pursue a growth agenda for his or her business. Why is this important? Growth typically improves a company’s competitive position and provides increased scale and leverage, and investors clearly value growth.
The pursuit of growth continues to be important regardless of the lifecycle of the company. Obviously it’s critical early in a company’s life... or it won’t be a company for long. But it continues to be important as a company develops. Virtually all businesses, even hyper-growth ones, inevitably experience slower growth as they get larger, with their growth rates falling relentlessly back down to Earth over time. I call this effect “gravity,” and it will weigh down even the most promising of companies—unless a CEO can find a way to accelerate growth and positively change the long-term growth trajectory of the business.
The first real operating job I had was managing eBay’s US business in mid-2000, which included the ebay.com website. Virtually all the revenue—and more than all of the profits—of the eBay company came from the US unit at the time, and despite the bursting of the bubble, eBay was still trading at highly robust multiples. So you can imagine the terror I felt when the US segment failed to deliver month-over-month growth for the first time ever in my first month on the job. The heavy weight of ...